Belt and Road

Belt and Road provides exporters with a brief analysis of political and economic risks for the countries under the Belt and Road Initiative.
Flag and map of Vietnam

 
Key Information
Capital   Hanoi
Population   95.5 million
Area   331,210 sq km
Currency   Dong (1 VND = 0.0000439207 USD as of 1 June 2018)
Official language   Vietnamese
Form of government   One-party Rule
Ease of doing business by World Bank   # 68 out of 190 in 2018 (↑14)
The Global Competitiveness Index by the World Economic Forum   # 55 out of 138 in 2017/18 (↑5)
Logistics Performance Index by World Bank   # 64 out of 160 in 2016
 
Major Merchandise Exports (% of total, 2017)   Major Merchandise Imports (% of total, 2017)
Telephones & mobile phones (21.1%)   Electronics, computers & related parts (17.7%)
Textiles & garments (12.2%)   Machinery, equipment & tools (16.2%)
Computers & electronic products (12.1%)   Telephones, mobile phones & related parts (7.7%)
Top three export countries (% of total, 2017)   Top three import countries (% of total, 2017)
USA (20.1%)   China (25.8%)
China (14.5%)   South Korea (20.5%)
Japan (7.9%)   Japan (7.8%)

Source: Economist Intelligence Unit

Political Highlights

 

Vietnam has a communist government and is one of several remaining one-party socialist states in the world today. The ruling Communist Party of Vietnam (CPV) has been in power since the end of the Vietnam war in 1975. In 2016, the CPV had chosen the incumbent general secretary Nguyen Phu Trong as the country’s top leader for a second five-year term. Official corruption remains a serious problem for the country, owing to the general lack of accountability and transparency. The country ranked 107th out of 180 countries in Transparency International's 2017 Corruption Index. The country has in recent years stepped up its fight against corruption, with several senior government officials and executives of state-owned enterprises arrested and jailed.

 

The country has long-standing territorial disputes with China in the South China Sea which are unlikely to be resolved in near term. However, recently both sides displayed commitments to resolve these disputes peacefully through dialogue. Defense relations between Vietnam and the U.S. have strengthened since 2016, when President Obama decided to lift the ban on the sale of assault weapons to Vietnam. The economic, political and military co-operation between the two countries will continue to deepen.

 

Economic Trend

^Forecast
Source: Economist Intelligence Unit


Vietnam’s economic growth accelerated to 6.8% year-on-year in 2017, topping a 6.2% expansion in 2016. The strong growth was driven by higher domestic demand, strong export growth and the government's economic reforms. Strong foreign direct investments in manufacturing, combined with competitive unit labor costs relative to peers (Malaysia, Thailand, and Indonesia) and participation in free trade agreements could provide further upside to the country’s export earnings in 2018. The country reported record performance for Q1 2018 with GDP grew 7.4% on the back of a strong outturn in manufacturing, retail sales and tourism.

 

Recent fuel price hikes have kicked up Vietnam’s inflation in May 2018 to 3.86% year on year. Furthermore, the country is looking to increase an environmental protection duty on fuel products in July this year which could further increase inflation and hurt businesses. The country has set an inflation target of 4% for 2018.

The country is a member of the Association of South East Asian Nations (ASEAN) and Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). It has also signed trade pacts with China, South Korea, Australia and New Zealand, India, Chile and Japan, and will likely sign the EU-Vietnam Free Trade Agreement (EVFTA) with the European Union (EU) in the second half of 2018.

 

Hong Kong – Vietnam Trade

Source: Census and Statistics Department of Hong Kong

 

Total exports from Hong Kong to Vietnam increased by 10.3% from HK$72,173 million in 2016 to HK$79,632 million in 2017. The top three export categories to Vietnam were: (1) telecommunications and sound recording and reproducing apparatus and equipment (+25.6%), (2) electrical machinery, apparatus and appliances, and electrical parts (+44.1%), and (3) textile yarn, fabrics, made-up articles, and related products (+17.5%), which represented 52.2% of total exports to Vietnam.

 

Source: Census and Statistics Department of Hong Kong

 

ECIC Underwriting Experience

 

The Hong Kong Export Credit Insurance Corporation (ECIC) imposes no restrictions on covering Vietnamese buyers. Currently, the insured buyers in Vietnam range from small and medium sized companies to subsidiaries of foreign listed companies. For 2017, the number and the amount of credit limit applications on Vietnam decreased by 20.2% and 54.5% respectively, while insured business increased by 30.6%. Major insured products were electrical appliances, electronics and textiles, which represented 72.7% of ECIC’s insured business on Vietnam. The Corporation’s underwriting experience on Vietnam has been has been satisfactory, with no claim payment or payment difficulty case reported during the past 12 months (from June 2017 to May 2018).

Please click here to download the charts (PDF format).

 

Last update: 13 June 2018

       
Flag and map of Thailand

 
Key Information
Capital   Bangkok
Population   69.0 million
Area   513,120 sq km
Currency   Thai Baht (1 THB = 0.0312068 USD as of 11 June 2018)
Official language   Thai
Form of government   Constitutional Monarchy
Ease of doing business by World Bank   # 26 out of 190 in 2018 (↑20)
The Global Competitiveness Index by the World Economic Forum   # 32 out of 137 in 2017/18 (↑2)
Logistics Performance Index by World Bank   # 45 out of 160 in 2016
Major merchandise exports (% of total, 2017)   Major merchandise imports (% of total, 2017)
Machinery (44.8%)   Machinery (44.8%)
Manufactured goods (12.5%)   Manufactured goods (17.5%)
Food (12.4%)   Minerals, fuels &lubricants (14.0%)
Top three export markets (% of total, 2017)   Top three import markets (% of total, 2017)
China (12.5%)   Japan (20.0%)
USA (11.3%)   China (14.6%)
Japan (9.5%)   USA (6.7%)

Source: Economist Intelligence Unit

Political Highlights

 

Thailand is a constitutional monarchy while the king's formal powers are limited. Prince Maha Vajiralongkorn became the country’s new king in December 2016 after his father Bhumibol Adulyadej died in October 2016. The country’s military has a history of intervening in politics. In May 2014, the country’s military seized control of the country after a coup deposed the elected government of Yingluck Shinawatra, resulting in the country's 19th coup since the end of absolute monarchy in 1932. The head of the army, General Prayuth Chan-ocha, was named as prime minister. The country in August 2016 passed a new military-backed constitution which empowered the military to select every one of the 250 senate members and granted them a veto on decisions by elected lawmakers. The new constitution affirmed the military government's rule and has restored stability. Elections, which would be held no later than February 2019, could restore some degree of civilian rule.

 

The military's seizure of power in 2014 initially cooled relations with Western countries but links are gradually being restored. The US administration under the president, Donald Trump, has led a partial rapprochement between the two countries, culminating in a state visit by Prayuth in October 2017. Similarly, the European Union's Foreign Affairs Council announced in December 2017 that it would re-establish political ties with Thailand at all levels.

The government has declared economic revival to be its priority and is pursuing policies aimed at boosting consumption and investment, including ramping up public spending on infrastructure. This includes the government’s Thailand 4.0 and Eastern Economic Corridor (EEC) initiatives as well as China’s Belt and Road initiative.

 

Economic Trend

*Estimate ^Forecast
Source: Economist Intelligence Unit


After the military seized power in 2014, the country’s economy rebounded with growth sustained by a pick-up in exports and tourism. Economic growth accelerated to 3.9% in 2017, from 3.3 % in 2016, bolstered by favorable global economic conditions and a pickup in domestic investment. For Q1 2018, growth surged to a five-year high of 4.8% year-on-year, compared to 4.0% in previous quarter. The government has implemented a number of policies geared toward enhancing productivity and competitiveness, in part to confront structural headwinds from an ageing population. The country climbed 20 spots to 26th place in the World Bank's Ease of Doing Business rankings as a result of efforts to reduce red tape in connection with starting a business; protecting minority investors; and improving contract enforcement.

 

Sustained current account surpluses and higher capital inflows over the past several years have driven an appreciation of the Thai baht and facilitated the accumulation of foreign reserves to USD213 billion in May 2018 from USD156 billion in 2015, which is helping the country to shield against volatility as US rates rise. The Thai baht remains one of the best-performing currencies in the region and has continued to strengthen against the US dollar in early 2018.

 

Hong Kong – Thailand Trade

Source: Census and Statistics Department of Hong Kong

 

Total exports from Hong Kong to Thailand increased by 12.9% from HK$47,949 million in 2016 to HK$54,135 million in 2017. The top three export categories to Thailand were: (1) telecommunications and sound recording and reproducing apparatus and equipment (+26.0%), (2) electrical machinery, apparatus and appliances, and electrical parts (+13.9%), and (3) office machines and automatic data processing machines (-0.1%), which represented 60.6% of total exports to Thailand.

 

Source: Census and Statistics Department of Hong Kong

 

ECIC Underwriting Experience

 

The Hong Kong Export Credit Insurance Corporation (ECIC) imposes no restrictions on covering Thailand buyers. Currently, the insured buyers in Thailand are mainly small and medium-sized companies. For 2017, the number and the amount of credit limit applications on Thailand decreased by 8.3% and 52.0% respectively, while insured business increased by 16.3%. Major insured products were electronics, cameras & optical goods and furniture, which represented 31.2% of ECIC’s insured business on Thailand. The Corporation’s underwriting experience on Thailand has been satisfactory, with no claim payment or payment difficulty case reported during the past 12 months (from June 2017 to May 2018).

Please click here to download the charts (PDF format).

 

Last update: 12 June 2018

     
Flag and map of Cambodia

 
Key Information
Capital   Phnom Penh
Population   16.2 million
Area   181,035 sq km
Currency   Cambodian Riel (1 KHR = 0.00025 USD as of 17 May 2018)
Official language   Khmer
Form of government   Constitutional Monarchy
Ease of doing business (2018) by World Bank   # 135 out of 190 in 2018 (↓4)
The Global Competitiveness Index by the World Economic Forum   # 66 out of 137 in 2017/18 (↑23)
Logistics Performance Index by World Bank   # 73 out of 160 in 2016
Major merchandise exports (% of total, 2015*)   Major merchandise imports (% of total, 2015*)
Manufactured goods (66.1%)   Manufactured goods (60.8%)
Agricultural products (4.9%)   Agricultural products (7.3%)
Fuels and mining products (0.1%)   Fuels and mining products (1.7%)
Top three export markets (% of total, 2017)   Top three import markets (% of total, 2017)
USA (21.5%)   China (34.1%)
UK (9.0%)   Singapore (12.8%)
Germany (8.6%)   Thailand (12.4%)
 

*Most recent data available
Source: Economist Intelligence Unit, World Trade Organization

Political Highlights

 

Cambodia is a constitutional monarchy with an elected parliamentary. The Prime Minister is the Head of Government while the King is the Head of State. Prime Minister Hun Sen has been ruling Cambodia since 1985 and his Cambodian People’s Party (CPP) is the largest party following the 2013 general election. The country is preparing for a July 2018 general election that Hun Sen is widely expected to win. The Cambodia National Rescue Party (CNRP), the main opposition party, was dissolved by the Supreme Court in November 2017 for allegedly plotting to overthrow Hun Sen’s government. In February 2018, the CPP also swept the country’s Senate election by winning all 58 elected seats, further entrenching the dominance of the CPP and Hun Sen.


Agriculture employs roughly two-thirds of the labor force and contributes one-third of economic output, while garment-making is the dominant industry, accounting for about 70% of exports. The government will continue focusing on improving basic living conditions and pursue policies to reduce Cambodia's dependence on low value-added garment manufacturing, which is highly substitutable between countries, and can migrate quickly to those with better price competitiveness.

 

Economic Trend

* Forecast
Source: The International Monetary Fund, Trading Economics

Cambodia’s economic growth has been one of the fastest among Asia’s developing economies in recent years, driven by garment exports, tourism as well as real estate and construction activities. Tourist arrivals accelerated to 11.8% in 2017, compared to 5.0% in 2016, driven by the country’s efforts in establishing more regional flights, including China. The current account deficit is forecast to widen as the cost of oil and other imported products rises. Still, the country’s GDP is expected to grow 6.9% in 2018, support by large foreign direct investment flows and investment in infrastructure.

 

Faced with increasing costs in traditional manufacturing locations such as China, many multinational apparel companies have moved their production to cheaper locations like Cambodia. However, as the issue of low pay has sparked protests in recent years, the government in 2017 increased the minimum wage in the garment sector by 9.3% to USD 153 per month and further increase by 11% to USD 170 in January 2018 (compared to just USD 66 per month in early 2013), roughly matching Vietnam’s and significantly higher than Bangladesh’s USD 65. The growing competition from other low-cost garment producers and potential labor unrest represent challenges to Cambodia. The country is also vulnerable to negative shocks because of the high dollarization of loans and deposits, which could stem from a potential sharp appreciation of the US dollar and spikes in US and domestic interest rates in 2018 and 2019.

 

 

Hong Kong – Cambodia Trade

Source: Census and Statistics Department of Hong Kong

 

Total exports from Hong Kong to Cambodia increased by 1.5% from HK$7,023 million in 2016 to HK$7,132 million in 2017. The top three export categories to Cambodia were: (1) textile yarn, fabrics, made-up articles and related products (+2.8%), (2) telecommunications and sound recording and reproducing apparatus and equipment (-40.3%), and (3) articles of apparel & clothing accessories (-13.8%), which represented 66.0% of total exports to Cambodia.

 

Source: Census and Statistics Department of Hong Kong

 

ECIC Underwriting Experience

 

The Hong Kong Export Credit Insurance Corporation (ECIC) has no insured business on Cambodia in the past 12 months (from May 2017 to April 2018).

 
Please click here to download the charts (PDF format).

 

Last update: 17 May 2018

Flag and map of Indonesia

 
Key Information
Capital   Jakarta
Population   260.6 million
Area   1,904,569 sq km
Currency   Indonesian Rupiah (1 USD = 14,169 IDR as of 24 May 2018)
Official language   Bahasa Indonesia
Form of government   Republic
Ease of doing business by World Bank   # 72 out of 190 (↑19) in 2018
The Global Competitiveness Index by the World Economic Forum   # 36 out of 137 in 2017/18 (↑5)
Logistics Performance Index by World Bank   # 63 out of 160 in 2016
Major merchandise exports (% of total, 2017)   Major merchandise imports (% of total, 2017)
Manufactured products (72.3%)   Raw & auxiliary materials (70.4%)
Mining & other sector products (22.3%)   Capital goods (16.0%)
Agricultural products (3.5%)   Consumer goods (13.3 %)
Top three export markets (% of total, 2017)   Top three import markets (% of total, 2017)
China (13.6%)   China (22.8%)
US (10.5%)   Singapore (10.7%)
Japan (10.4%)   Japan (9.8%)

Source: Economist Intelligence Unit

Political Highlights

 

Indonesia is the world's third most populous democracy and the world's largest Muslim-majority country. Political environment has been relatively stable since the country’s first direct presidential election in 2004. The current president, Joko Widodo, is the first president to come from outside the political and military background, and he has no ties with influential families. Since taking office in 2014, Widodo has been successful in pushing through some of his economic reform pledges, aided by a number of professional technocrats which lead the top economic ministries. In January 2018, Widodo made his third cabinet reshuffle, which provides more balance to influential groups and parties in the political system. Now Widodo still enjoys widespread popularity across the country and is well placed for re-election in April 2019.
 

The country has the largest Muslim populations and remains vulnerable to Islamic radicalism with occasional terrorist attacks over the past years. The authorities have been working hard to fight against terrorism and approved a tougher anti-terrorism law in late May 2018 after the recent bombings. Relative to other Islamic countries, the country maintains relatively good diplomatic ties with the US, and is one of the few Muslim-majority countries that have been excluded from President Donald Trump's travel bans into the US. On a diplomatic front, Indonesia and India recently agreed to align their national maritime policies. Both countries agreed to develop maritime and economic infrastructure on their respective outer island. This result in a rebalancing of powers and countries in the geographical neighborhood.

 

Economic Trend

*Estimate ^Forecast
Source: Economist Intelligence Unit


Indonesia is the largest economy in Southeast Asia. The country is a leading commodities exporter in a number of resources, including coal, palm oil, cocoa, tin and nickel. Economic growth in 2017 accelerated to 5.1%, the highest growth rate in four years. Growth continued to expand at a pace of 5.1% in the first quarter of 2018. The growth was attributed to improved global trade, recovery in commodity prices, as well as higher government spending. The country’s sound macro-economic fundamentals continue to provide a solid buffer against rising global volatilities. In 2017, the country’s sovereign bonds were all rated investment grade by all three major credit rating agencies S&P, Moody’s and Fitch, this is the first time since the Asian financial crisis.

 

The Indonesian rupiah has depreciated by around 3% against US dollar this year as a result of gradual tightening of US monetary policy. Around 40% of the country’s rupiah-denominated government debts are in hands of foreign investors and therefore is vulnerable to sudden capital outflows. Most recently in May 2018, despite stable inflation, the central bank raised interest rate twice in a month to support the currency.

The country’s outlook continues to be largely positive despite global economic growth is projected to slow. Economic growth in 2018 is projected to reach 5.2% on the back of strong private consumption and the continued strength of commodity prices.

 

Hong Kong – Indonesia Trade

Source: Census and Statistics Department of Hong Kong

 

Total exports from Hong Kong to Indonesia increased by 7.2% from HK$20,922 million in 2016 to HK$22,421 million in 2017. The top three export categories to Indonesia were: (1) telecommunications and sound recording and reproducing apparatus and equipment (+1.9%), (2) textile yarn, fabrics, made-up articles and related products (+3.1%), and (3) office machines and automatic data processing machines (-6.1%), which represented 58.2% of total exports to Indonesia.

 

Source: Census and Statistics Department of Hong Kong

 

ECIC Underwriting Experience

 

The Hong Kong Export Credit Insurance Corporation (ECIC) imposes no restrictions on covering Indonesian buyers. Currently, the insured buyers in Indonesia range from small and medium sized companies to subsidiaries of foreign listed companies. The Corporation’s major insured products were clothing, chemical products and plastic articles, which represented 61% of ECIC’s insured business on Indonesia in 2017. The Corporation’s underwriting experience on Indonesia has been satisfactory, with no claim payment or payment difficulty case reported in the past 12 months (from May 2017 to April 2018).

Please click here to download the charts (PDF format).

 

Last update: 24 May 2018

Flag and map of Thailand

 
Key Information
Capital   Bandar Seri Begawan
Population   0.4million
Area   513,120 sq km
Currency   Thai Baht (1 THB = 0.0312068 USD as of 11 June 2018)
Official language   Thai
Form of government   Absolute Monarchy
Ease of doing business by World Bank   # 56 out of 190 in 2018 (↑16)
The Global Competitiveness Index by the World Economic Forum   # 46 out of 137 in 2017/18 (↑12)
Logistics Performance Index by World Bank   # 70 out of 160 in 2016
Major merchandise exports (% of total, 2015*)   Major merchandise imports (% of total, 2015*)
Fuels and mining products (89.6%)   Manufactured goods (70.5%)
Manufactured goods (6.3%)   Agricultural products (19.8%)
Agricultural products (0.1%)   Fuels and mining products (9.6%)
Top three export markets (% of total, 2016)   Top three import markets (% of total, 2016)
Japan (35.8%)   USA (27.6%)
South Korea (16.4%)   Malaysia (23.3%)
Thailand (10.3%)   Singapore (6.9%)

* Most recent data available
Source: Economist Intelligence Unit, World Trade Organization

Political Highlights

 

Brunei Darussalam (“Brunei”) is an absolute monarchy where the Sultan is both the Chief of State and Head of Government. The country’s political environment is expected to remain stable in 2018-19 owing to the well-entrenched autocracy under the rule of Hassanal Bolkiah. There is currently only one legal political party, the Parti Pembangunan (PP, National Development Party) which was legalised in 2005 but appears to be inactive.

 

Brunei relies excessively on its oil and gas exports which causes economic growth to be heavily influenced by the energy prices. There is no personal income tax or capital gain tax in the country. The government provides housing subsidies, free medical services and free education through the university level. However, there has been growing concern about the country’s ability to maintain high spending levels without imposing additional taxes, as oil prices fell sharply in the past few years.

In March 2018, Brunei and 10 other countries signed the Comprehensive and Progressive Agreement for Trans Pacific Partnership (CPTPP), a free trade agreement linking the Asia-Pacific countries, through which Brunei will have enhanced market access to these economies in the hope of diversifying its economy.

The country was named the most improved economy in the world for three years in a row in the World Bank's Doing Business Report 2018. Within four years the country has jumped 49 places to 56th and the significant improvements reflect the commitment of the government towards creating a pro-business environment that would enable further diversification of the country's economy.
 

Economic Trend

*Estimates  #Actual  ^Forecast
Source: Economist Intelligence Unit , International Monetary Fund, Department of Economic Planning and Development


Brunei is a rich country, ranked 6th in the world according to the GDP per capita data by IMF. The country possesses vast natural resources including crude oil and natural gas. The oil and gas sector contributed about one-third of its GDP and over 90% of its exports. Between 2013 and 2016, the economy contracted as oil prices plummeted to their lowest level in a decade and oil production suffered from unexpected disruptions. As oil and gas prices recover, the economy showed signs of improvement in 2017. However, oil and gas reserves are in steady decline and expected to run out within two decades.

For greater diversification of the economy to reverse the declining fortunes, the country has outlined the “Brunei Vision 2035” long-term development plan, which aims to transform the country into a regional trading and financial hub within the next two decades.

The country is expected to see a modest recovery in 2018 with a small positive growth led by improvement in oil and gas production and expansion in investment as infrastructure and foreign direct investment construction projects are progressing.

 

 

Hong Kong – Brunei Trade

Source: Census and Statistics Department of Hong Kong

 

Total exports from Hong Kong to Brunei decreased by 1.7% from HK$162 million in 2016 to HK$159 million in 2017. The top three export categories to Brunei were: (1) telecommunications and sound recording and reproducing apparatus and equipment (-47.5%), (2) petroleum, petroleum products and related materials (+28.4%), and (3) professional, scientific and controlling instruments and apparatus (+1,018.3%), which represented 52.5% of total exports to Brunei.

 

Source: Census and Statistics Department of Hong Kong

 

ECIC Underwriting Experience

 

The Hong Kong Export Credit Insurance Corporation (ECIC) imposes no restrictions on covering Bruneian buyers. In the past 12 months (from May 2017 to April 2018), the insured business from Brunei was limited and there was no claim payment or payment difficulty case reported.

 

Please click here to download the charts (PDF format).

 

Last update: 18 May 2018

       
Flag and map of Mongolia

 
Key Information
Capital   Ulaanbaatar
Population   3 million
Area   1,566,500 sq km
Currency   Togrog (1 MNT = 0.000417109 USD as of 8 May 2018)
Official language   Mongolian
Form of government   Republic
Ease of doing business (2018) by World Bank   # 62 out of 190 in 2018 (↑2)
The Global Competitiveness Index by the World Economic Forum   # 101 out of 137 in 2017/18 (↑1)
Logistics Performance Index by World Bank   # 108 out of 160 in 2016
Major merchandise exports (% of total, 2016*)   Major merchandise imports (% of total, 2016*)
Raw materials (77.3%)   Consumer goods (53.1%)
Intermediate goods (18.2%)   Capital goods (25.8%)
Capital goods (2.8%)   Intermediate goods (17.0%)
Top three export markets (% of total, 2017)   Top three import markets (% of total, 2017)
China (85.0%)   China (32.6%)
United Kingdom (10.7%)   Russia (28.1%)
Russia (1.1%)   Japan (8.4%)

*Most recent data available
Source: Economist Intelligence Unit, World Bank

Political Highlights

 

Mongolia is a multiparty parliamentary democracy with both a president and a prime minister. The prime minister is the Head the Government, while the president has limited powers including the ability to veto legislation and to propose his own laws to parliament. The Democratic Party (DP) and the Mongolian People’s Party (MPP) are the country’s two largest parties. The MPP won a landslide victory by securing 65 out of 76 seats in the general election of June 2016. However, the MPP in 2017 lost a key presidential election to the opposition DP candidate Khaltmaagiin Battulga and the Prime Minister Jargaltulga Erdenebat was removed following a no-confidence motion. The new prime minister Ukhnaa Khurelsukh took office in October 2017. No Mongolian prime minister has completed a four-year term since 2004 and parliamentary politics will continue to be plagued by periods of instability in the form of internal conflicts and the intermittent turnover of government officials.

 

The two neighbor countries China and Russia exert significant influence over the landlocked Mongolia. The country’s “third neighbor" foreign policy appears to be weakening as China's looming presence persists. With the signing of the China-Mongolia-Russia economic corridor in June 2016, which is one of the six priority corridors envisioned by China’s Belt and Road Initiative, the Sino-Mongolian relations entered a new era of economic cooperation that will be vital to the country’s economic recovery and long term stability.

 

Economic Trend

*Estimate ^Forecast
Source: Economist Intelligence Unit, The IMF


Mongolia’s economy is heavily reliant on mining and minerals and the country’s economic performance has been tumultuous in the past 7 years. It was the world's fastest-growing economy in 2011 with GDP growth of 17.3% on the back of a mining boom and attracted billions of dollars in foreign investment. The boom ended as commodities prices slumped in 2014 coupled with slower demand from China. The country faced a debt crisis in 2016 largely driven by a debt-financed public spending spree since 2011. In May 2017, the cash-strapped government announced a USD 5.5 billion bailout agreement with the International Monetary Fund (IMF) and other development partners, including the World Bank, the Asian Development Bank and the governments of Japan and South Korea. The rescue program called sets of policy changes including increases in personal income tax rates, increases in fuel, alcohol and tobacco taxes, and a public service wage freeze.

 

The country’s economy bounced back strongly in 2017, with GDP growth of 5.1%, due to a sharp rise in commodity prices and volumes of coal and copper exports. Economic growth is forecast to remain solid in 2018 and 2019 on back of continued investment in mining, particularly in the development of the Oyu Tolgoi and Tavan Tolgoi mine projects. However, as a commodity-reliant economy, the country’s susceptibility to commodity price boom-bust cycles remains high. Continued government commitment to the program will be the key in ensuring that macroeconomic buffers are built up and hence reducing the country’s vulnerability to boom-bust cycles in the future.

 

Hong Kong – Mongolia Trade

Source: Census and Statistics Department of Hong Kong

 

Total exports from Hong Kong to Mongolia increased by 17.5% from HK$ 211 million in 2016 to HK$ 248 million in 2017. The top three export categories to Mongolia were: (1) office machines and automatic data processing machines (+43.8%), (2) telecommunications and sound recording and reproducing apparatus and equipment (+19.7%), and (3) beverages (-10.1%), which represented 74.5% of total exports to Mongolia.

 

Source: Census and Statistics Department of Hong Kong

 

ECIC Underwriting Experience

 

The Hong Kong Export Credit Insurance Corporation (ECIC) imposes no restrictions on covering Mongolian buyers. In the past 12 months (from May 2017 to April 2018), the insured business from Mongolia was limited and there was no claim payment or payment difficulty case reported.

 

Please click here to download the charts (PDF format).

 

Last update: 10 May 2018

   
Flag and map of Singapore

 
Key Information
Capital   Singapore City
Population   5.6 million
Area   719 sq km
Currency   Singapore Dollar (1 SGD = 0.750963 USD as of 3 May 2018)
Official language   Mandarin, English, Malay and Tamil
Form of government   Parliamentary Democracy
Ease of doing business (2018) by World Bank   # 2 out of 190 in 2018 (same as 2017)
The Global Competitiveness Index by the World Economic Forum   # 3 out of 138 in 2017/18 (↓1)
Logistics Performance Index by World Bank   # 5 out of 160 in 2016
Major Exports (% of total, 2016*)   Major Imports (% of total, 2016*)
Mineral fuels (14.8%)   Machinery & transport equipment (47.9%)
Electronic components and parts (13.8%)   Mineral fuels (17.5%)
Chemicals & chemical products (13.8%)   Miscellaneous manufactured articles (9.2%)
Top three export countries (% of total, 2017)   Top three import countries (% of total, 2017)
China (14.4%)   China (13.8%)
Hong Kong (12.3%)   Malaysia (11.9%)
Malaysia (10.6%)   U.S. (10.6%)

*Most recent data available
Source: Economist Intelligence Unit, The World Factbook

Political Highlights

 

Singapore is parliamentary democracy, with an elective, non-executive presidency. The Prime Minister Lee Hsien Loong is the leader of the majority People's Action Party (PAP) in parliament. The governing PAP has been in power since 1959 and is forecast to remain in office following the next parliamentary general election in 2021. The president, PAP-endorsed candidate Halimah Yacob, was elected for a six-year term in September 2017 but the uncontested election in which applications from four candidates were rejected had led to small-scale protests against the government.

 

Singapore maintains close ties with its close neighbors Malaysia and Indonesia which has been strengthened in recent years by projects such as the high-speed rail link and on issues of mutual concern such as anti-terrorism. The country’s membership of regional trade pacts including the Comprehensive and Progressive Partnership for Trans-Pacific Partnership (CPTPP) will also prove essential to its long-term economic prospects. Furthermore, Singapore is EU's largest commercial partner in ASEAN, accounting for around one-third of EU-ASEAN trade in goods and services, and roughly two-thirds of investments between the two regions. In October 2014, a free trade agreement (the “EUSFTA”) was signed between Singapore and the European Union (EU) and is expected coming into force by the end of 2019. EUSFTA is the first deal between the EU and a South-East Asian economy which paves the way for greater engagement between the two regions.

Singapore is a highly developed economy but the human rights in Singapore still have a long way to go. The government has broad powers to limit citizens' rights and inhibit political opposition. Freedom of expression and peaceful assembly are restricted. Domestic media is tightly controlled and recently a number of global tech giants raised concerns over the government’s plan to introduce new legislation to rein in fake news. The country was ranked 151 out of 180 in the World Press Freedom Index for 2017.

 

Economic Trend

* Forecasts
Source: Economist Intelligence Unit


Singapore’s highly developed free-market economy owes its success in large measure to its remarkably open and corruption-free business environment, prudent monetary and fiscal policies, and a transparent legal framework. Its strategic location between the East and West make it one of the world’s top transportation hubs for sea and air cargo. It is also the second freest economy behind Hong Kong according to the 2018 Index of Economic Freedom.

 

The country is highly dependent on international trade which represented 318% of the GDP in 2016 according to the WTO. The economy performed better than expected in 2017 with a GDP growth of 3.6% driven by stronger external demand particularly in semiconductor exports. The highly open economy leaves it vulnerable to external shocks. However, its high current account surplus provides an ample buffer against capital flow volatility. For 2018, economic growth is expected to slow down to 3.0% owing to expected slower economic expansion of its trading partner China.

 

In April 2018, Standard & Poor's affirmed the country’s “AAA” long-term credit rating and the rating outlook was stable. The affirmation primarily reflects the country’s strong external position, continued political stability, credible monetary policy and sound fiscal framework.

 

Hong Kong – Singapore Trade

Source: Census and Statistics Department of Hong Kong

 

Total exports from Hong Kong to Singapore decreased by 0.4% from HK$ 61,285 million in 2016 to HK$ 61,023 million in 2017. The top three export categories to Singapore were: (1) Electrical machinery, apparatus and appliances, and electrical parts (+17.2%), (2) telecommunications and sound recording and reproducing apparatus and equipment (+2.5%), and (3) office machines and automatic data processing machines (-13.2%), which represented 61.5% of total exports to Singapore.

 

Source: Census and Statistics Department of Hong Kong

 

ECIC Underwriting Experience

 

The Hong Kong Export Credit Insurance Corporation (ECIC) imposes no restrictions on covering Singaporean buyers. Currently, the insured buyers in Singapore range from small and medium sized companies to listed companies. For 2017, the number of credit limit applications on Singapore decreased 18.8% while the amount of credit limit applications increased 81.8%. Insured business decreased by 2.7%. Major insured products were travel goods, electronics and artificial flowers, which represented 56.1% of ECIC’s insured business on Singapore. The Corporation’s underwriting experience on Singapore has been satisfactory, with no claim payment or payment difficulty case reported during the past 12 months (from May 2017 to April 2018).

 

Please click here to download the charts (PDF format).

 

Last update: 7 May 2018

Flag and map of Nepal

 
Key Information
Capital   Kathmandu
Population   28.5 million
Area   147,181 sq km
Currency   Nepalese Rupee (1 NPR = 0.00934368 USD as of 3 May 2018)
Official language   Nepali
Form of government   Republic
Ease of doing business (2018) by World Bank   # 105 out of 190 in 2018 (↑2)
The Global Competitiveness Index by the World Economic Forum   # 88 out of 138 in 2017/18 (↑10)
Logistics Performance Index by World Bank   # 124 out of 160 in 2016
Major merchandise exports (% of total, 2016-17)   Major merchandise imports (% of total, 2016-17)
Carpets & other textile floor coverings (10.4%)   Mineral fuels, oils & related products (14.2%)
Coffee, tea, mate & spices (9.6%)   Iron & steel (9.5%)
Man-made staple fibres (9.6%)   Nuclear reactors, boilers, machinery & mechanical appliances (8.3%)
Top three export markets (% of total, 2016-17)   Top three import markets (% of total, 2016-17)
India (57.0%)   India (65.2%)
U.S. (12.3%)   China (13.2%)
Turkey (5.7%)   United Arab Emirates (3.0%)

Fiscal years ending July 15th
Source: Economist Intelligence Unit

Political Highlights

 

Nepal adopted a new constitution in 2015 following years of political instability. The 2015 Constitution represented a key milestone for Nepal which included its first local elections in 20 years, elections to the House of Representatives and seven provincial assemblies. Nepal successfully held elections for all three levels of government (local, provincial and national) in late 2017 and moved from a unicameral to a bicameral parliament. The Communist Party of Nepal (CPN) emerged as the largest party in all three elections. Khadga Prasad Sharma Oli, the leader of the CPN, became the country’s prime minister in February 2018.

 

Nepal is a landlocked nation between India and China. The two countries compete for influence in Nepal, and the relationship between China and Nepal has been deepened in recent time, mainly owing to the Nepali government's policy of expanding its international reach since the blockade by India along the border in 2015. China has since increased their investments in Nepal’s agriculture, hydropower, information technology, tourism and infrastructure. In April 2018, China and Nepal are also exploring the possibility of a free trade agreement.

 

Economic Trend

* Estimates
Fiscal years ending July 15th

Source: Economist Intelligence Unit, The IMF, World Bank


Nepal relies heavily on foreign aid as the country is among the least developed countries in the world, with about one-quarter of its population living below the poverty line.

 

The country was hit by a devastating earthquake in early 2015 which damaged infrastructure and homes. Reconstruction efforts continued to dominate the policy agenda but growth is expected to slow from 7.5% in 2017 to 4.6% in 2018 and 4.5% in 2019 due to the heaviest floods in August 2017 combined with slow recovery of exports, slowdown in remittances and an increase in lending rates, according to the World Bank. In addition, the current account deficit will expand in the coming years owing to falling remittance inflows, higher oil prices as well as higher import of inputs for reconstruction work and infrastructure development.

 

Agriculture is the mainstay of the economy, providing a livelihood for almost two-thirds of the population. According to recent South Asian Climate Outlook Forum in April 2018, Nepal is likely to witness a normal monsoon this year, which is a synonymous with higher agricultural yields.

 

Hong Kong – Nepal Trade

Source: Census and Statistics Department of Hong Kong

 

Total exports from Hong Kong to Nepal increased by 55.2% from HK$ 1,230 million in 2016 to HK$ 1,910 million in 2017. The top three export categories to Nepal were: (1) telecommunications and sound recording and reproducing apparatus and equipment (+45.4%), (2) non-ferrous metals (+122.9%), and (3) photographic apparatus, equipment and supplies and optical goods, watches and clocks (+10.2%), which represented 90.1% of total exports to Nepal.

 

Source: Census and Statistics Department of Hong Kong

 

ECIC Underwriting Experience

 

The Hong Kong Export Credit Insurance Corporation (ECIC) imposes no restriction on covering Nepali buyers. In the past 12 months (from May 2017 to Apr 2018), the insured business from Nepal was limited and there was no claim payment or payment difficulty case reported.

 

Please click here to download the charts (PDF format).

 

Last update: 3 May 2018



Key Information

Capital

Vienna

Population

8.6 million

Area

83,871 sq km

Currency

Euro (1 EUR = 1.2335 USD as of 13 April 2018)

Official language

German

Form of government

Federal Parliamentary Republic

Ease of doing business (2018) by World Bank

# 22 out of 190 (3)

The Global Competitiveness Index by the World Economic Forum

# 18 out of 137 in 2017/18 (1)

Logistics Performance Index by World Bank

# 7 out of 160 in 2016

Major merchandise exports (% of total, 2015*)

Major merchandise imports (% of total, 2015*)

Manufactured goods (84.5%)

Manufactured goods (76.9%)

Agricultural products (9.7%)

Fuel and mining products (11.9%)

Fuel and mining products (5.2%)

Agricultural products (10.2%)

Top three export markets (% of total, 2015*)

Top three import markets (% of total, 2015*)

European Union (67.5%)

European Union (69.5%)

Switzerland (5.8%)

China (5.9%)

Russia (1.5%)

Switzerland (5.8%)

*Most recent data available

Source: Economist Intelligence Unit, World Trade Organization

Political Highlights

 

In May 2017, Austria called for an early parliamentary election after the grand coalition of the centre-right Austrian People’s Party (ÖVP) and the centre-left Social Democratic Party (SPÖ) fell apart following the resignation of Reinhold Mitterlehner from the positions of vice-chancellor, economy minister and leader of the ÖVP. Sebastian Kurz, the youngest leader at 31, took over the leadership of the ÖVP and won the presidential election in October 2017. The far right Freedom Party (FPÖ) was invited to join the coalition government.

 

The European migrant crisis has been Austria’s dominant issue in its domestic politics and international relations since 2015. In March 2018, the new government presented its budget for 2018 and 2019 and announced that it aimed to run a small deficit of 0.4% this year and roughly balanced budget next year. The government pledged to cut public spending and reduce benefits for groups including migrants and workers' children living abroad, potentially leading to tensions with eastern member states in particular.

 

Economic Trend

^ Forecast

Source: Economist Intelligence Unit

Austria has been a member of the United Nations (UN) since 1955 and joined the European Union (EU) in 1995, and is a founder of the Organisation for Economic Co-operation and Development (OECD). It is an export-oriented country with some 70% of its foreign trade with EU member states. Austria’s credit strengths include its very wealthy and diversified economy, low private sector debt and high debt affordability. Austria has reported current account surpluses since 2002 and its GDP per capita is one of the highest in the EU. The general government debt-to-GDP ratio increased over the past years (from 69% in 2008) primarily reflected support for banks and Austria's participation in euro area rescue packages. The ratio declined in 2016 and 2017 and is expected to fall further given the anticipated positive current account.

 

Austria achieved a real GDP growth of 3.1% in 2017, the fastest growth rate since 2007 and above growth in Germany for the first time since 2005. Real GDP growth is forecasted at 1.6% on average for 2017-21 supported by domestic and export demand, compared with 1.5% on average for the EU as a whole.

 

In March 2018, Standard & Poor's gave a positive mark to Austria’s a strong external position with sustained current account surpluses and declining external debt levels. The long-term credit rating was affirmed at “AA+“ and the rating outlook was stable. The affirmation primarily reflects Austria’s strong growth outlook and S&P’s expectation that the new government will broadly preserve policy continuity.

 

Hong Kong – Austria Trade

 

Source: Census and Statistics Department of Hong Kong

 

Total exports from Hong Kong to Austria increased by 5.6% from HK$ 4,767 million in 2016 to HK$ 5,033 million in 2017. The top three export categories to Austria were: (1) electrical machinery, apparatus & appliances, & electrical parts (+33.2%), (2) telecommunications & sound recording & reproducing apparatus & equipment (+7.0%), and (3) articles of apparel and clothing accessories (-4.8%), which represented 65.5% of total exports to Austria.

 

Source: Census and Statistics Department of Hong Kong

 

ECIC Underwriting Experience

 

The Hong Kong Export Credit Insurance Corporation (ECIC) imposes no restrictions on covering Austrian buyers. Currently, the insured buyers in Austria are mainly small and medium-sized companies and subsidiaries of foreign listed companies. For 2017, the number of credit limit applications on Austria increased 12.5% while the amount of credit limit applications decreased 12.3%. Insured business increased by 1.9%. Major insured products were chemical products, electrical appliances and clothing, which represented 57.3% of ECIC’s insured business on Austria. The Corporation’s underwriting experience on Austria has been satisfactory, with no claim payment or payment difficulty case reported during the past 12 months (from April 2017 to March 2018).

 

 

Please click here to download the charts (PDF format).

 

Last update: 17 April 2018

 

 

Strengths

Ÿ  One of the largest domestic markets in east-central Europe

Ÿ  Low labor cost

Challenges

Ÿ  Declining population

 

Key Information

Capital

Bucharest

Population

21.5 million

Area

238,391 sq km

Currency

Romanian leu (1 RON = 0.2644 USD as of 23 March 2018)

Official language

Romanian

Form of government

Semi-presidential republic

Ease of doing business by World Bank

# 45 out of 190 in 2017 (↓8)

The Global Competitiveness Index by the World Economic Forum

# 68 out of 137 in 2017/18 (6)

Logistics Performance Index by World Bank

# 60 out of 160 in 2016

Major Merchandise Exports (% of total, 2016)

Major Merchandise Imports (% of total, 2016)

Machinery & equipment (47.0%)

Machinery & equipment (38.2%)

Base metals & products (7.8%)

Chemicals & products (10.0%)

Textiles & products (7.1%)

Textiles & products (7.0%)

Top three export markets (% of total, 2016)

Top three import markets (% of total, 2016)

Germany (21.5%)

Germany (20.5%)

Italy (11.6%)

Italy (10.3%)

France (7.2%)

Hungary (7.5%)

Source: Economist Intelligence Unit

Political Highlights

 

Romania is a semi-presidential republic. With the promise to strengthen the independence of judicial system and tackle corruption, Klaus Iohannis from the National Liberal Party (NLP) won the Presidency election in 2014. However, Centre-left Social Democratic Party (PSD) is the main parliamentary and governing party and it won the parliamentary elections in 2016. Political volatility remained high in 2017. There are waves of anti-government protest on easing penalties for corruption proposed by PSD and voted in the Parliament.  After stepping down of two members of PSD as Prime Minister during the year, the President appointed Viorica Dancila as prime minister in Jan 2018, who also ties with PSD.  The next presidential election will be held in 2019 while the next parliamentary election will be held at the end of 2020 or early 2021.

 

Since the Romania's accession to the European Union in January 2007, the European Commission established the co-operation and verification mechanism to assist the country in reaching EU standards in effectiveness and transparency of the judiciary, the legislature and the administration and the fight against corruption.  According to the most recent review in November 2017, the Commission concluded that although some progress had been made, reform momentum had broadly been lost in recent months. Challenges to the judicial independence had been a persistent cause for concern. EU also expressed concerns about Romania’s fight against corruption in recent decriminalization action against corruption.

 

Romania targeted for higher wage rises and infrastructure spending in order to help the economy close the gap with others in central and eastern Europe. Real GDP growth at around 7% in 2017 was driven by higher household consumption. The Ministry of Finance expects a budget deficit of 3% of GDP in 2018, but it was just meeting the requirement of the EU under its Stability and Growth Pact (SGP).

Economic Trend

* Estimates
 ^ Forecasts

Source: Economist Intelligence Unit

Romania has undertaken a strong fiscal consolidation and reduced its macroeconomic imbalances since 2010. Following years of austerity measures, the country has relaxed its fiscal policy. The standard VAT rate was lowered from 24% to 20% on 1 January 2016 and further to 19% in early 2017. Personal income tax has been reduced from 16% to 10% from January 2018. On the other hand, Romania raised interest rate from the record low 1.75% in almost a decade to 2% in January 2018. Fiscal relaxation, wage increases, low level interest rate and lower fuel prices have boosted private consumption. Economic growth is forecast to reach 7.0% in 2017 with domestic demand continuing as the main driver of growth.

Romania is one of the largest domestic markets in east-central Europe. However, its GDP per capita was relatively low, at only 31.1% of the EU average in 2017, representing a considerable scope for catch-up. Higher investment in R&D will be needed to underpin convergence. Romania has one of the lowest expenditure on research and development (R&D) in the EU with below 0.5% of GDP. Infrastructure remains one of the major factors holding back investment. Romania is on the way connecting the highways by 2020. Meanwhile, demographic structure is unfavorable, mainly due to low fertility rate. Romania is expected to see its population shrink by 17% between 2017 and 2050.

Romania is not yet a member of the euro area. In the Jun 2016 assessment made by the European Commission and European Central Bank, it revealed that Romanian did not meet the criteria for joining the Euro.  Romania aims to adopt the Euro currency in 2022.

Hong Kong – Romania Trade

Source: Census and Statistics Department of Hong Kong

 

Total exports from Hong Kong to Romania decreased by 4.7% from HK$3,420 million in 2016 to HK$3,258 million in 2017. The top three export categories to Romania were: (1) electrical machinery, apparatus & appliances, & parts (+22.3%), (2) telecommunications, audio & video equipment (-29.7%), and (3) power generating machinery and equipment (+3.6%), which represented 82.3% of total exports to Romania.

 

Source: Census and Statistics Department of Hong Kong

 

ECIC Underwriting Experience

 

The Hong Kong Export Credit Insurance Corporation (ECIC) imposes no restrictions on covering Romanian buyers. Currently, the insured buyers in Romania range from small and medium sized companies to manufacturing arms of foreign listed companies. For 2017, the number and the amount of credit limit applications on Romania increased by 57.9% and decreased by 31.6% respectively, and insured business decreased by 52.7%. Major insured products were electronics, jewellery,and electrical appliances which represented 78.3% of ECIC’s insured business on Romania. The Corporation’s underwriting experience on Romania has been satisfactory, with no payment difficulty or claim payment case reported during the past 12 months (from March 2017 to February 2018).  

Please click here to download the charts (PDF format)

 

Last update: 23 March 2018



Key Information

Capital

Vilnius

Population

2.8 million

Area

65,300 sq km

Currency

Euro (1 EUR = 1.2258 USD as of 21 March 2018)

Official language

Lithuanian

Form of government

Republic

Ease of doing business by World Bank

# 16 out of 190 in 2018 (5)

The Global Competitiveness Index by the World Economic Forum

# 41 out of 137 in 2017/18 (6)

Logistics Performance Index by World Bank

# 29 out of 160 in 2016

Major merchandise exports (% of total, 2016)

Major merchandise imports (% of total, 2016)

Mineral products (17.8%)

Chemicals (25.3%)

Machinery & equipment (15.4%)

Machinery & equipment (17.0%)

Transport equipment (9.2%)

Foodstuffs (10.4%)

Top three export markets (% of total, 2016)

Top three import markets (% of total, 2016)

Russia (13.5%)

Russia (14.5%)

Latvia (9.9%)

Poland (12.2%)

Poland (9.1%)

Germany (10.9%)

Source: Economist Intelligence Unit

Political Highlights

 

Lithuania gained its independence from the Soviet Union in the early 1990s and joined the European Union and NATO in 2004. Lithuania adopted the euro in January 2015 and now benefiting from the lower cost of doing business with member countries, elimination of foreign exchange risk as well as access to the monetary union's highly developed capital markets.

 

After the general election in October 2016, a coalition government was formed which comprised of the Lithuanian Peasant and Greens Union (LVZS) and the Social Democratic Party (LSDP) together holding 73 out of 141 seats in the parliament. However, in September 2017 the LSDP pulled out from the coalition government after a period of heightened tension between the two parties, leaving the LVZS-nominated prime minister Saulius Skvernelis to in charge of a minority administration that controls only 56 seats which caused policymaking became more challenging. Lithuania's next parliamentary election is scheduled for October 2020. The opposition Homeland Union-Lithuanian Christian Democrats had recently called for early elections but was rejected by the parliament.

 

Lithuania’s action plan to join the Organization for Economic Cooperation and Development (OECD) by 2018 is currently in progress, and it is expected to complete accession negotiations by the end of May 2018 and to receive an invitation for membership in June 2018.

 

Economic Trend

* Estimates ^ Forecast

Source: Economist Intelligence Unit, Statistics Lithuania

Lithuania's flexible economy and the implementation of sound policies allowed a strong post-crisis adjustment and supported the country's ability to withstand the trade shock emanating from Russia. It enjoyed robust growth during 2000-2007 but suffered from a recession during the global financial crisis in 2008-2009 with GDP growth slumped as much as 15%. Lithuania became a member of the euro zone in January 2015, and the economy benefited from increasing trade integration as well as diversification of its export markets away from Russia. The economy has recovered strongly with GDP, wages and employment levels back up to their pre-crisis levels. Lithuania's GDP growth grew by 3.8% in 2017, the fastest since 2011 on the back of continued robust private consumption.

 

Adverse demographic remains the major challenge for Lithuania due to aging population and emigration as well as skill mismatch that limits domestic labour supply. The population has been declining by more than 1% annually since the early 2000s, as people leave to seek better-paid quality jobs abroad. The working-age population was forecasted to decline by about 9% between 2015 and 2020, and by a further 20% in the 2020s.

 

In early March 2018, Standard & Poor's gave a positive mark to Lithuania's fiscal policies and economic growth outlook. The long-term credit rating was upgraded from “A-“ to “A” and the rating outlook was stable. The upgrade primarily reflects S&P’s expectation that Lithuania's economy will continue to post strong rates of real economic growth, averaging 2.8% over 2018-2021, resulting in further progress toward economic convergence

with eurozone levels.

Hong Kong – Lithuania Trade

Source: Census and Statistics Department of Hong Kong

 

Total exports from Hong Kong to Lithuania increased by 52.1% from HK$ 748 million in 2016 to HK$ 1,138 million in 2017. The top three export categories to Lithuania were: (1) telecommunications, audio & video equipment (+90.3%), (2) electrical machinery, apparatus & appliances, & parts (+16.5%), and (3) office machines & computers (+117.0%), which represented 83.9% of total exports to Lithuania.

 

Source: Census and Statistics Department of Hong Kong

 

ECIC Underwriting Experience

 

The Hong Kong Export Credit Insurance Corporation (ECIC) imposes no restrictions on covering Lithuanian buyers. Currently, the insured buyers in Lithuania are mainly small and medium-sized companies. For 2017, the number of credit limit applications on Lithuania was unchanged while the amount of credit limit applications decreased 33.2%. Insured business increased by 34.1%. Major insured products were clothing, electronics and toys, which represented 55.3% of ECIC’s insured business on Lithuania. The Corporation’s underwriting experience on Lithuania has been satisfactory, with no claim payment or payment difficulty case reported during the past 12 months (from March 2017 to February 2018).

 

 

Please click here to download the charts (PDF format).

 

Last update: 23 March 2018


 

Key Information

Capital

Antananarivo

Population

25.1 million

Area

592,000 sq km

Currency

Ariary (1 MGA = 0.0003 USD as of 22 March 2018)

Official language

Malagasy, French

Form of government

Republic

Ease of doing business by World Bank

# 162 out of 190 in 2018

The Global Competitiveness Index by the World Economic Forum

# 121 out of 137 in 2017/18 (7)

Logistics Performance Index by World Bank

# 147 out of 160 in 2016

Major merchandise exports (% of total, 2015*)

Major merchandise imports (% of total, 2015*)

Fuels and mining products (35.4%)

Manufactured goods (56.4%)

Agricultural products (30.8%)

Fuels and mining products (19.8%)

Manufactured goods (28.7%)

Agricultural products (16.3%)

Top three export markets (% of total, 2016*)

Top three import markets (% of total, 2016*)

European Union (45.2%)

China (21.3%)

USA (13.0%)

European Union (16.4%)

China (6.4%)

India (6.5%)

* Most recent year for which data are available

Sources: Economist Intelligence Unit, World Trade Organization

Political Highlights

 

Madagascar is an island country located in the Indian Ocean, off the coast of East Africa. Current president Hery Rajaonarimampianina was elected in 2013, who led to the formation of Madagascar’s first democratic government since a coup in 2009. The legislature is a 151-seat national assembly, which was convened in 2014 following the election in 2013. The next presidential and national assembly elections are due to be held in late 2018.

 

One of the main challenges to the government is to combat corruption. According to the Corruption Perceptions Index 2017 published by Transparency International, Madagascar is ranked 155th out of 180 economies in the index, dropping ten places from the previous year. Madagascar also ranks behind regional peers such as Mozambique, Tanzania and Comoros. Nevertheless, the authorities have made certain efforts to rein in corruption, such as the operation of a new anti-corruption centre in the capital, Antananarivo.

 

Externally, following the coup in 2009, Madagascar was removed from the African Growth and Opportunity Act (AGOA) in 2010, which was a piece of the United States legislation aimed at enhancing market access to the United States for qualifying sub-Saharan African countries. After the formation of a new democratically elected government, Madagascar was restored of the trade privileges under the AGOA in 2015.

Economic Trend

* Estimates

Source: International Monetary Fund

Madagascar depends on the agricultural sector, including fishing and forestry, which represents about 25% of GDP and employs around 80% of the population. However, Madagascar is vulnerable to extreme weather events, such as cyclones and outbreaks of plague. In March 2017, cyclone Enawo splashed the country and damaged approximately 30% of the vanilla crop, hindering economic growth.

 

To reinforce macroeconomic stability and boost sustainable and inclusive growth, the International Monetary Fund (IMF) approved a 40-month US$304.7 million funding arrangement for Madagascar in July 2016. Since launching of the arrangement, the IMF has brought disbursements totaling US$174.1 million. In December 2017, the IMF completed the second review of Madagascar’s program, viewing that gradual economic recovery has continued, with solid growth and continued macroeconomic stability despite the natural disasters hitting Madagascar during the year.

 

Madagascar’s economy is forecast to grow faster in 2018 than it did last year, supported by the forecast of a recovery in agriculture fuelled by new donor-funded projects. The current account is expected to continue registering a deficit in coming years on the back of a robust import growth. Looking ahead, it is of vital importance for Madagascar to strengthen the country's ability to cope with the natural disasters.


Hong Kong – Madagascar
Trade

Source: Census and Statistics Department of Hong Kong

 

Total exports from Hong Kong to Madagascar increased by 7.8% from HK$0.29 million in 2016 to HK$0.31 million in 2017. The top three export categories to Madagascar were: (1) telecommunications, audio & video equipment (+34.9%), (2) textiles (-9.0%), and (3) machinery specialized for particular industries (-45.5%), which represented 66.9% of total exports to Madagascar.

 

Source: Census and Statistics Department of Hong Kong

 

ECIC Underwriting Experience

 

The Hong Kong Export Credit Insurance Corporation (ECIC) offers coverage on Malagasy buyers with payment terms in Irrevocable Letter of Credit (ILC) and on a case-by-case basis. The Corporation’s underwriting experience on Madagascar has been satisfactory, with no claim payment or payment difficulty case reported in the past 12 months (from March 2017 to February 2018).

 

 

Please click here to download the charts (PDF format).

 

Last update: 22 March 2018



Key Information

Capital

Riga

Population

2.0 million

Area

64,589 sq km

Currency

Euro (1 EUR = 1.2341 USD as of 20 March 2018)

Official language

Latvian

Form of government

Republic

Ease of doing business by World Bank

# 19 out of 189 in 2018

The Global Competitiveness Index by the World Economic Forum

# 54 out of 137 in 2017/18 (5)

Logistics Performance Index by World Bank

# 43 out of 160 in 2016

Major merchandise Exports (% of total, 2016)

Major merchandise Imports (% of total, 2016)

Machinery & equipment (17.0%)

Machinery & equipment (20.7%)

Timber products (16.9%)

Chemicals (10.6%)

Foodstuffs (7.9%)

Transport equipment (9.6%)

Top three export markets (% of total, 2016)

Top three import markets (% of total, 2016)

Lithuania (17.8%)

Lithuania (17.4%)

Estonia (11.8%)

Germany (12.7%)

Russia (11.7%)

Poland (10.7%)

Source: Economist Intelligence Unit

Political Highlights

 

After being annexed by the Soviet Union in 1940, Latvia regained independence in 1991 and moved swiftly to adopt a parliamentary republic. The legislature is the 100-seat unicameral parliament, which is elected by proportional representation through party lists. The president, who is the head of state, is elected by the parliament for a period of four years and a maximum of two consecutive terms. The president appoints the prime minister, subject to approval by the parliament, with which most powers rest.

Latvia is characterized by frequent changes in its government, yet the frequent reshuffles have little impact on policy continuity. Every government since independence has been centre right with a pro-business agenda. The current centre-right coalition government has been in power since 2014, consisting of the Union of Greens and Farmers, the Unity coalition and the National Alliance. Following the resignation of former prime minister Laimdota Straujuma in December 2015, Maris Kucinskis took office in February 2016, bringing an end to two months of political uncertainty.

Latvia maintained good links with Russia in economic terms, as Russians constituted Latvia's largest ethnic minority group (representing around a quarter of the population) and Russia was one of Latvia’s largest trading partners. However, Latvia’s relationship with Russia has become more complicated since Russia's annexation of Crimea in 2014 and subsequent destabilisation of eastern Ukraine. In response to the rising threat from Russia, Latvia has focused on countering Russian media influence, diversifying energy supplies, raising defence spending and co-operating with the North Atlantic Treaty Organization (NATO) forces.

Economic Trend

* Estimates
^ Forecast

Source: Economist Intelligence Unit

Latvia is a small and open economy driven by the export sector, representing about 60% of its GDP. Four cornerstones of the Latvian economy are agriculture, chemicals, logistics and woodworking. Latvia joined the European Union (EU) and the Eurozone in 2004 and 2014 respectively, while it has one of the highest levels of income inequality in the EU. One of government’s priorities is to reduce social inequality.

It is expected that Latvia’s economy will grow by an average of 3.7% between 2018 and 2022, mainly supported by the forecast of stronger private consumption and investment. Inflation is expected to stand at an average of 2.8%, partly due to strong domestic demand and robust global energy prices.

Latvia joined the Organisation for Economic Co-operation and Development (OECD) in June 2016, signaling its status as one of the developed and democratic market economies in the world. However, Latvia has one of the fastest declining working-age populations within the OECD, trigged by a low fertility rate and the consistent net emigration. This will raise the dependency ratio and exert pressure on public finances in the long run. On the other hand, Latvia’s exports are dominated by low-value-added goods. It remains challenging for the country to move up the value chain of its products to avoid trade imbalance.

Hong Kong – Latvia Trade

 

Source: Census and Statistics Department of Hong Kong

 

Total exports from Hong Kong to Latvia increased by 39.1% from HK$516 million in 2016 to HK$718 million in 2017. The top three export categories to Latvia were: (1) electrical machinery, apparatus & appliances, & parts (+74.4%), (2) telecommunications, audio & video equipment (+13.3%), and (3) office machines & computers (+110.5%), which represented 85.3% of total exports to Latvia.

 

Source: Census and Statistics Department of Hong Kong

 

ECIC Underwriting Experience

 

The Hong Kong Export Credit Insurance Corporation (ECIC) imposes no restrictions on covering Latvian buyers. For 2017, the number and the amount of credit limit applications on Latvia decreased by 43.8% and increased by 161.4%, respectively. Insured business decreased by 14.1%. Major insured products were electrical appliances, Toys and electronics, which represented 90.6% of ECIC’s insured business on Latvia. The Corporation’s underwriting experience on Latvia has been satisfactory, with no claim payment or payment difficulty case reported during the past 12 months (March 2017 to February 2018).

Please click here to download the charts (PDF format).

 

Last update: 20 March 2018

 


 

Key Information

Capital

Cape Town (legislative), Pretoria (administrative) and Bloemfontein (judicial)

Population

56.5 million

Area

1,219,090 sq km

Currency

South African Rand (1 ZAR = 0.0843 USD as of 8 March 2018)

Official language

11 languages including Afrikaans and English

Form of government

Republic

Ease of doing business by World Bank

# 82 out of 190 in 2018 (↓8)

The Global Competitiveness Index by the World Economic Forum

# 61 out of 137 in 2017/18 (14)

Logistics Performance Index by World Bank

# 20 out of 160 in 2016

Major merchandise exports (% of total, 2016)

Major merchandise imports (% of total, 2016)

Mineral products (20.5%)

Machinery (24.4%)

Precious metals (16.5%)

Mineral products (13.9%)

Vehicles, aircraft and vessels (13.4%)

Vehicles, aircraft and vessels (9.8%)

Top three export markets (% of total, 2016)

Top three import markets (% of total, 2016)

China (9.1%)

China (19.2%)

Germany (7.5%)

Germany (12.5%)

USA (7.3%)

USA (7.1%)

Source: Economist Intelligence Unit

Political Highlights

 

The African National Congress (ANC) has been the dominant political party in South Africa since 1994. Jacob Zuma was elected as President in 2009 and for another five years since 2014. Zuma has overseen a tumultuous nine years in power marked by economic decline. Facing multiple charges of corruption, he resigned in February 2018 on eve of no-confidence vote. Cyril Ramaphosa, formerly the Deputy President, was elected by the National Assembly on 15 February 2018 following the resignation of Jacob Zuma.   

 

The ANC suffered major setbacks in key urban areas in local government elections to the Democratic Alliance with only 54% of the vote in the 2016 (compared to 62% in 2011). The ANC’s performance was undermined primarily by the high unemployment and slow service delivery in rural areas and townships that are characterised by high levels of poverty and rampant income inequality.

 

Low growth lies at the heart of South Africa's fiscal problems. Shortfall in government revenue in combination with rising poverty and unemployment has increased pressures on expenditures. Unemployment has historically been a challenge for South Africa and has remained at persistently high levels over the past two decades. According to the Statistics South Africa, unemployment rate  declined slightly from record highs of 27.7%, to 26.7% in the fourth quarter of 2017. Cyril Ramaphosa, the new President, said that he will play an active role to help curb the shedding of jobs in the country.

Economic Trend

* Estimates
 ^ Forecasts

Source: Economist Intelligence Unit, Statistics South Africa

After recording the slowest growth in 2016, the South African economy has been heading in a stronger direction in recent times, riding a wave of positive sentiment following the election of Cyril Ramaphosa as the new president. The economy grew by 1.3% in 2017, exceeding National Treasury’s expectation of 1.0% growth announced last year. The fourth quarter experienced the highest growth rate of 2017, with the economy expanding by 3.1% quarter-on-quarter.The strengthening in economic activity over 2017 was partly driven by an agriculture industry bouncing back from one of the worst droughts in recent history, as well as improvement in the finance and mining industries. It is expected that growth will show a broad upward trend during 2018
22, underpinned by a modest pick-up in the global economy but will be constrainted by high unemployment, skills shortages and high levels of policy and political uncertainty.

 

South Africa’s ruling party ANC took an aggressive approach by increasing sales tax ahead of elections next year as new President Cyril Ramaphosa seeks to stabilize debt and prevent a third junk credit rating. For the first time since 1993 the rate of VAT will be increased from 14% to 15%. Other taxes such as alcohol, tobacco, levies on fuel and estate duty will also be increased. The annual cost cutting programme is expected to save 5% a year through consolidating State procurement. As a result, the 2018/19 Budget deficit is projected to fall from 4.3% to 3.6%.

 

Moody’s is the only major credit rating agency that still rates South Africa’s debt at investment grade after S&P and Fitch downgraded the country in 2017 following political changes that sapped confidence and knocked financial markets. Moody’s placed its credit rating of “Baa3” on a 90-day review for downgrade in November 2017 and the review will assess the 2018 Budget setting out the government's plan to respond to the country's economic and fiscal challenges. Unless other events bring greater clarity in advance of that date, Moody’s will likely conclude its review for downgrade following the tabling of the 2018 budget. The possible credit downgrade by Moody’s and costlier borrowing will constraint South Africa’s ability to restore budget discipline without higher taxes.

 

Hong Kong – South Africa Trade

Source: Census and Statistics Department of Hong Kong

 

Total exports from Hong Kong to South Africa increased by 22.3% from HK$ 7,320 million in 2016 to HK$ 8,951 million in 2017. The top three export categories to South Africa were: (1) telecommunications, audio & video equipment (+25.8%), (2) office machines & computers (+62.6%), and (3) electrical machinery, apparatus & appliances, & parts (+73.4%), which represented 83.1% of total exports to South Africa.

Source: Census and Statistics Department of Hong Kong

 

ECIC Underwriting Experience

 

The Hong Kong Export Credit Insurance Corporation (ECIC) imposes no restrictions on covering South African buyers. Currently, the insured buyers in South Africa range from small and medium sized companies to listed companies. For 2017, the number and amount of credit limit applications on South Africa decreased by 6.3% and increased by 12.5% respectively, while insured business decreased by 20.1%. Major insured products were metallic products, clothing and chemical products, which represented 65.4% of ECIC’s insured business on South Africa. The Corporation’s underwriting experience on South Africa has been satisfactory, with two claim cases reported in the past 12 months (from March 2017 to February 2018), involving clothing, and food.

Please click here to download the charts (PDF format)

 

Last update: 14 March 2018

 



Key Information

Capital

Minsk

Population

9.5 million

Area

207,600 sq km

Currency

Belarusian Ruble (1 BYN = 0.000051 USD as of 14 March 2018)

Official language

Russian and Belarusian

Form of government

Semi-presidential republic

Ease of doing business by World Bank

# 38 out of 190 in 2017 (6)

Logistics Performance Index by World Bank

# 120 out of 160 in 2016

Sources: Economist Intelligence Unit

Political Highlights

 

Belarus is part of the former Soviet republic and attained its independence in 1991. Ethnic Belarusians account for over 80% of the country’s total population, while the next largest ethnic groups are Russians and Poles. Alexander Lukashenko, who is the first and the only directly elected president, has been in office since 1994. As no significant opposition candidates were allowed to stand, he won 83.5% of the vote in his fifth term presidential election.

Lukashenko has firm grip on power in Belarus with the constitution vesting most power in the president. Against the backdrop of the Ukraine-Russia conflict, and amid Belarus's challenging economic environment, Lukashenko emphasized his role as a guarantor of stability. However, a presidential decree that taxes the unemployed and part-time workers leaded to a growing protest against Lukashenko’s Soviet-style rule.

Belarus depends heavily on Russia for financial and political support. It joined the Russia-backed Eurasian Economic Union in January 2015. Lukashenko tries to maintain a delicate balance between close cooperation with Russia and guarding Belarusian sovereignty. On the other hand, there has been progress in EU-Belarus relations. The EU lifted most of the restrictive measures in Feb 2016 and activating economic and other cooperation-related measures. Still, the EU takes the situation regarding human rights and democracy in Belarus very seriously. EU diplomats have decided to extend the EU arms embargo on Belarus by another year.

Economic Trend

* Estimates

Source: The International Monetary Fund (IMF)

Belarus has a largely state-controlled economy, with about 80% of the economy under government control. Manufacturing is the key sector, as befits its heritage as the former engineering powerhouse of the Soviet Union, despite some of the industrial base has become obsolete and inefficient. The country also exports refined oil products at market prices produced from Russian crude oil purchased at a discount.

Russia accounts for about half of Belarus’s total trade. Belarus’s economy was negatively affected by a faltering Russian economy and low global oil prices in between 2015 and 2016. The economy was recovering in 2017 benefited from more favorable external environment, stronger demand and better policies.  The narrowed current account deficit was attributed to the growth in export of services.  About 50% of the service exports are transportation services, which reflect the favorable geographical position of Belarus.

With limited foreign direct investment, Belarus relies on external debt to finance its current account deficit. Economic troubles in Russia highlight the risk of Belarus’s reliance on Russia’s funding.  Although the near-term financing pressure has been eased by the energy and financing agreements with Russia, and successful issuance of Eurobond in 2017, medium-term financing needs are significant given its high external and public debts.

Hong Kong – Belarus Trade

Source: Census and Statistics Department of Hong Kong

 

Total exports from Hong Kong to Belarus increased by 48.4% from HK$457 million in 2016 to HK$678 million in 2017. The top three export categories to Belarus were: (1) telecommunications, audio & video equipment (+56.6%), (2) office machines & computers (+44.4%), and (3) electrical machinery, apparatus & appliances, & parts (+15.1%), which represented 95.4% of total exports to Belarus.

 

Source: Census and Statistics Department of Hong Kong

 

 

ECIC Underwriting Experience

 

The Hong Kong Export Credit Insurance Corporation (ECIC) offers coverage on Belarusian buyers with payment terms in Irrevocable Letter of Credit (ILC). In the past 12 months (from Mar 2017 to Feb 2018), there was no insured business on Belarus.

 

Please click here to download the charts (PDF format)

 

Last update: 14 March 2018



Key Information

Capital

Tehran

Population

82.0 million

Area

1,648,195 sq km

Currency

Rial (1 USD = 37,407 IRR as of 06 Mar 2018)

Official language(s)

Persian

Form of government

Islamic Republic

Ease of doing business by World Bank

# 124 out of 190 in 2017 (6)

The Global Competitiveness Index by the World Economic Forum

# 69 out of 140 in 2017/18 (7)

Logistics Performance Index by World Bank

# 96 out of 160 in 2016

Major Exports (% of total, 2016)

Major Imports (% of total, 2016)

Oil & gas (66.4%)

Machinery (28.9%)

Chemicals & petrochemicals (10.3%)

Intermediate goods (13.5%)

Fresh & dry fruits (2.3%)

Chemicals (11.2%)

Top three export countries (% of total, 2016)

Top three import countries (% of total, 2016)

China (29.7%)

UAE (27.6%)

India (16.5%)

China (13.1%)

South Korea (9.5%)

Turkey (7.7%)

Source: Economist Intelligence Unit (http://www.eiu.com)

Political Highlights

 

Iran is a theocratic country that mixes religion with politics. According to its constitution, its laws and regulations must be based on Islamic criteria. The supreme leader, who has no fixed terms, exerts ideological and political control over a system dominated by clerics. The current supreme leader, Ayatollah Ali Khamenei, was chosen by a directly elected body of religious leaders, the Assembly of Experts, in 1989. Iran’s president is the country’s second-highest-ranking official, elected for four years and is limited to serving no more than two consecutive terms. While the president is often the public face of the Iranian government, his actual power is circumscribed by the constitution, which subordinates the executive branch to the supreme leader.

Persian Iran is the only non-Arab country in the Gulf region. Its predominant religion, Shiite Islam, is shared by a majority of Iraqis and Bahrainis, but at a significant minority in other Gulf states. Relations between Iran and most other Gulf countries have been historically strained mainly due to the Shia-Sunni divide.

Iran had long been sanctioned by the western countries for its nuclear program. In July 2015, Iran reached an agreement with a group of world powers, including the US, UK, Russia, France, China and Germany, to limit its nuclear program in exchange for sanctions relief. The final nuclear deal was implemented In January 2016 after International Atomic Energy Agency (IAEA) confirmed that Iran was in compliance with the provisions of the Joint Comprehensive Plan of Action (JCPOA), the formal outline for the nuclear deal. The re-election of president Hasan Ruhani in May 2017 generated public expectation that the economic benefit from JCPOA will expand. However, non-nuclear sanctions are still in place. Currently, the US is still blocking foreign banks from accessing the US financial system related to facilitating any trade involving Iran, reflecting the fact that a range of US unilateral restrictions on Iran, related to human rights, terrorism and weapons of mass destruction, remain in place.  Also, Iran’s ballistic missile programme has been a source of tension between Iran and its regional neighbors.  These raise the risk of new sanctions from Western countries.

Economic Trend

* Estimates
 ^ Forecasts

Source: Economist Intelligence Unit

Iran has the second largest economy in the Middle East and North Africa (MENA) region after Saudi Arabia; and the second largest population after Egypt. Its economy is characterized by a large hydrocarbon sector, small scale agriculture and services sectors, and a noticeable state presence in manufacturing and financial services. Iran’s GDP growth soared to 13.4% in 2016 benefited from the easing of nuclear related sanctions by the West.  Such growth was mainly attributed to boost in crude oil export. The growth in oil export is slowing but the economic recovery is beginning to extend to non-oil areas.

Iranian authorities have adopted a comprehensive strategy encompassing market-based reforms as reflected in the government’s 20-year vision document and issued a sixth five-year development plan for the 2016-2021 period. The sixth five-year development plan comprised of three pillars, namely, the development of a resilient economy, progress in science and technology, and the promotion of cultural excellence.

For decades, Iran has been isolated from the rest of financial world. Large portion of Iranian banks are struggling to comply with international norms and immersed in high level of bad loans. Also, there are no leading international bank is ready to deal with Iran-related business due to sanction related to terrorism allegations. The central bank is seeking to tackle the problem for entrance and presence of international banks to encourage more competition in the monetary market. Long time high inflation rate, youth unemployment and corruption problem result in recent social unrest will hinder the economic stability.

Hong Kong – Iran Trade

Source: Census and Statistics Department of Hong Kong

 

Total exports from Hong Kong to Iran increased by 71.6% from HK$1,050 million in 2016 to HK$1,802 million in 2017. The top three export categories to Iran were: (1) telecommunications, audio & video equipment (+224.7%), (2) electrical machinery, apparatus & appliances, & parts (+47.1%), and (3) machinery specialized for particular industries (+11.6%), which represented 71.6% of total exports to Iran.

 

Source: Census and Statistics Department of Hong Kong

 

ECIC Underwriting Experience
 

The Hong Kong Export Credit Insurance Corporation (ECIC) offers coverage on Iranian buyers with payment terms in Irrevocable Letter of Credit (ILC). In the past 12 months (from January 2017 to December 2017), there was no insured business on Iran.

 

 

Please click here to download the charts (PDF format).

 

Last update: 06 March 2018



Key Information

Capital

Skopje

Population

2.1 million

Area

25,713 sq km

Currency

Macedonian Denar (1 MKD = 0.0199 USD as of 28 February 2018)

Official language

Macedonian, Albania

Form of government

Parliamentary republic

Ease of doing business by World Bank

# 11 out of 190 in 2018

The Global Competitiveness Index by the World Economic Forum

# 60 out of 140 in 2015/16 (3)*

Logistics Performance Index by World Bank

# 106 out of 160 in 2016

Major merchandise exports (% of total, 2015*)

Major merchandise imports (% of total, 2015*)

Manufactured goods (82.0%)

Manufactured goods (61.4%)

Agricultural products (12.2%)

Fuels and mining products (25.9)

Fuels and mining products (5.8%)

Agricultural products (12.6%)

Top three export markets (% of total, 2016*)

Top three import markets (% of total, 2016*)

European Union (79.9%)

European Union (62.0%)

Serbia (8.9%)

Serbia (8.0%)

Bosnia and Herzegovina (1.7%)

China (6.2%)

* Most recent year for which data are available

Sources: Economist Intelligence Unit, the World Trade Organization

Political Highlights

 

Macedonia's president is elected for a five-year term. The president appoints the prime minister, and legislative power is vested in parliament. Current president Gjorge Ivanov, who took office in 2009, was elected for a second five-year term in 2014.

In the parliamentary election held in December 2016, the ruling Internal Macedonian Revolutionary Organisation-Democratic Party of Macedonian National Unity (VMRO-DPMNE) won the largest share but failed to secure the support of the Democratic Union for Integration (DUI) to continue its coalition government. Subsequently, the Social Democratic Alliance of Macedonia (SDSM) formed a coalition government in May 2017 with the support of several ethnic Albanian parties, including the DUI.

Macedonian is the major ethnic group in Macedonia, followed by Albanian. Relations between the two groups have long been problematic. Meanwhile, the country's name remains a contentious issue. It is still referred to as the Former Yugoslav Republic of Macedonia (FYROM) at the United Nations, due to Greek objection to Macedonia’s name, insisting it implies territorial claim on the northern Greek province of the same name. The dispute hinders Macedonia’s accession to the European Union and the North Atlantic Treaty Organization.

Economic Trend

* Estimates

Source: International Monetary Fund

Macedonia has a small open economy which is closely linked to Europe as a major export market and source of investment. Macedonia’s trade deficit has narrowed markedly from 28.7% of GDP in 2008 to lower than 20% in 2016, helped by strong export performance. However, real GDP growth slowed in the last two years, as internal political unrest has weighed on domestic private and public investments.

Following three straight years of deflation from 2014 to 2016, Macedonia experienced a low inflation in 2017, led by higher energy prices. An expected wage growth for the coming years will bring upward pressure on inflation.

Macedonia’s economy is forecast to grow by an average of 3.0% between 2018 and 2022, supported by an improving political stability. Going forward, it remains challenging for Macedonia to take significant efforts to generate economic growth that will create more jobs, as unemployment rate was still high at above 20% in 2017.

Hong Kong – Macedonia Trade

Source: Census and Statistics Department of Hong Kong

 

Total exports from Hong Kong to Macedonia increased by 5.1% from HK$138 million in 2016 to HK$145 million in 2017. The top three export categories to Macedonia were: (1) telecommunications, audio & video equipment (-4.0%), (2) office machines & computers (+277.7%), and (3) photographic apparatus, equipment and supplies and optical goods; watches and clocks (+91.9%), which represented 91.1% of total exports to Macedonia.

 

Source: Census and Statistics Department of Hong Kong

 

ECIC Underwriting Experience

 

The Hong Kong Export Credit Insurance Corporation (ECIC) offers coverage on Macedonian buyers with payment terms in Irrevocable Letter of Credit (ILC) and on a case-by-case basis. In the past 12 months (from February 2017 to January 2018), there was no insured business on Macedonia.

 

 

Please click here to download the charts (PDF format).

 

Last update: 28 February 2018



Strengths

Ÿ  Competitive high-tech export sector

Ÿ  Well-educated labor force

Ÿ  Offshore gas reserves

Challenges

Ÿ  Complicated political environment

Ÿ  Unresolved conflict with Palestine

Ÿ  Regional geopolitical tensions

 

Key Information

Capital

Jerusalem

Population

8.3 million

Area

20,770 sq km

Currency

Israeli New Sheqel (1 ILS = 0.2863 USD as of 23 February 2018)

Official language

Hebrew, Arabic

Form of government

Parliamentary democracy

Ease of doing business by World Bank

# 54 out of 190 in 2017 (↓1)

The Global Competitiveness Index by the World Economic Forum

# 16 out of 137 in 2017/18 (8)

Logistics Performance Index by World Bank

# 28 out of 160 in 2016

Major merchandise exports (% of total, 2016)

Major merchandise imports (% of total, 2016)

Chemicals & chemical products (excl refining) (24.7%)

Machinery & equipment (11.5%)

Electronic communication, medical & scientific equipment (16.3%)

Consumer non-durable goods (11.4%)

Polished diamonds (14.2%)

Diamonds (gross) (10.0%)

Top three export markets (% of total, 2016)

Top three import markets (% of total, 2016)

US (33.7%)

US (12.4%)

Hong Kong (8.5%)

China (9.1%)

UK (7.5%)

Switzerland (6.6%)

Source: Economist Intelligence Unit

Israel is a parliamentary democracy. Its political spectrum is highly fragmented with the electoral system favoring smaller political parties. As a result, larger parties require the support of small parties to form and maintain coalition governments. A coalition government was formed with right-leaning and religious parties. Prime Minister Benjamin Netanyahu promoted his free-market policies since his first premiership in 1996-99. He continued his policies when he was Finance Minister in 2003 by controlling the public sector spending and removed some barriers to competition. A program was set up to end welfare dependency by requiring people to apply for jobs or training. Netanyahu continued his second premiership in 2009 to present. Israel has been 14 years of continuous GDP growth and lowering debt-to-GDP ratio. However, Netanyahu is involving in recent corruption allegations.

Israel is the only country in the world with a majority Jewish population. Jews represent 75% of the population while Arabs make up 21%. The government is facing public discontent over wide income inequality. The infrastructure, education, and other public services in Arab areas have long lagged behind those in Jewish areas. In order to improve living standard of Arab minority and narrow gap with its Jewish population, the government has approved a US$ 3.9 billion five-year spending plan in 2016.

On the diplomatic front, Israel does not have formal relations with much of the Arab world. The US, which provides crucial diplomatic and military support, is considered Israel’s most important ally. The country has long been locked in conflict with the Palestinians and its Arab neighbors over ownership of land considered holy by many Jews, Christians and Muslims. The long-standing Israeli-Palestinian conflict remains unresolved. The recent recognition of the Holy city as Israel’s capital and the decision to transferring its embassy in May 2018 by the United States, has increased the tension between Israel, Muslim and Arab nations.  

Economic Trend

* Estimates
 ^ Forecasts

Source: Economist Intelligence Unit

Israel has a market economy with a thriving high-technology sector, which accounts for more than 40% of total manufacturing exports. The development of industries such as life sciences, water technologies, communication, military equipment and semiconductor is supported by heavy investment in technology and a well-educated labor force.

Israel is in an environment of very low inflation and close to a state of full employment. The central bank reduced its benchmark interest rate to a record low of 0.1% in early 2015 and has left it unchanged since then. The unemployment rate also dropped to a 30-year low of 4.0% in Dec 2017. After two years of deflation, inflation crossed into a positive territory in 2017 but still below the target of 1-3% by the central bank. The central bank expects the wages increase will have an inflationary effect when the decline in commodity price exhausted. So far, Israel has displayed a remarkable resilience to regional political uncertainty and security concerns by integrating in the world economy through trade and capital market channels. Looking ahead, the Israeli economy is expected to rebound, thanks to stronger domestic demand and recovering global activity.

Over the past decade, debt sustainability has substantially improved with government debt-to-GDP ratio declining from a peak of 93% of GDP in 2003 to 59.9% of GDP in 2017. In the meantime, natural gas reserves discovered off Israel's coast have also improved energy security and balance-of-payments prospects. Israel-Palestine conflict and regional instability remains the major threat to the economy.

Hong Kong – Israel Trade

Source: Census and Statistics Department of Hong Kong

 

Total exports from Hong Kong to Israel decreased by 11.2% from HK$16,456 million in 2016 to HK$14,617 million in 2017. The top three export categories to Israel were: (1) non-metallic mineral manufactures (-21.2%), (2) telecommunications, audio & video equipment (+31.9%), and (3) electrical machinery, apparatus & appliances, & parts (+17.8%), which represented 86.4% of total exports to Israel.

Source: Census and Statistics Department of Hong Kong

 

ECIC Underwriting Experience

 

The Hong Kong Export Credit Insurance Corporation (ECIC) imposes no restrictions on covering Israeli buyers. Currently, the insured buyers in Israel range from small and medium sized companies to listed companies. For 2017, the number of credit limit applications on Israel decreased by 13.6%, while the amount of credit limit applications and insured business increased by 68.7% and 25.4% respectively. Major insured products were electronics, chemical products and metallic products, which represented 50.9% of ECIC’s insured business on Israel. The Corporation recorded three payment difficulties but no claim case reported during the past 12 months (from February 2017 to January 2018).

 

 

Please click here to download the charts (PDF format)

 

Last update: 27 February 2018


 

 

Key Information

 

Capital

Panama City

 

Population

4.0 million

 

Area

75,517 sq km

 

Currency

Balboa, US dollar (1 PAB = 0.9985 USD as of 20 February 2018

 

Official language

Spanish

 

Form of government

Presidential republic

 

Ease of doing business by World Bank

# 79 out of 190 in 2018 (↓9)

 

The Global Competitiveness Index by the World Economic Forum

# 50 out of 137 in 2017/18 (↓8)

 

Logistics Performance Index by World Bank

# 40 out of 160 in 2016

 

Major merchandise exports (% of total, 2015*)

Major merchandise imports (% of total, 2015*)

 

Manufactured goods (92.5%)

Manufactured goods (90.6%)

 

Agricultural products (5.7%)

Agricultural products (7.7%)

 

Fuels and mining products (0.6%)

Fuels and mining products (1.5%)

 

Top three export markets (% of total, 2015*)

Top three import markets (% of total, 2015*)

 

European Union (27.5%)

USA (25.9%)

 

USA (19.7%)

European Union (11.7%)

 

Costa Rica (7.7%)

China (9.6%)

 

* Most recent year for which data are available

Source: Economist Intelligence Unit, the World Trade Organization

Political Highlights

 

Panama is a stable, multi-party, democratic country. The president is elected for a five-year term but cannot seek immediate re-election. Juan Carlos Varela of the centre-right Panameñista Party won the 2014 presidential election. His government lacks a majority in the National Assembly but has allied with the centre-left Democratic Revolutionary Party and part of the centre-right Democratic Change Party. The next presidential and legislative elections are set for May 2019.

Lying at the crossroads of the North and South American continents and the Atlantic and Pacific oceans, Panama is strategically important. Every year more than 15,000 vessels pass through the Panama Canal. The country maintains close relations with the US. They cooperate in many ways, such as promoting trade and combating drug trafficking. On the other hand, Panama strengthens its strategic partnership with China through the establishment of formal diplomatic relations in June 2017 and signing of co-operation agreements that cover a multiple range of areas such as transport, agriculture, trade, investment, power generation and tourism. Panama Canal is also regarded as a strategic bridge to extend China's Belt and Road Initiative to Latin America.

Economic Trend


* Estimates

Source: The International Monetary Fund

 

Panama has a well-developed service sector centered on the Panama Canal, related logistics and distribution services, as well as insurance, banking and tourism. The sector accounts for about three-quarters of the country’s economic output. Panama is a fully dollarized economy in which the US dollar is legal tender due to the country’s close links with the United States. Inflationary pressure is relatively low in the region.

Panama has had the highest average growth in Latin America over the past decade. Robust economic growth in recent years has had a positive impact on the country’s social indicators. According to the World Bank, Panama managed to reduce poverty from 21% to 17% between 2011 and 2015. However, as a small economy, Panama is vulnerable to external shocks. Also, while full dollarization in Panama eliminates currency risk, the flexibility of monetary policy to adjust economy is somewhat restrained.

Going forward, Panama’s growth is likely to remain one of the highest in the region, mainly supported by the US business cycle expansion and progress on infrastructure projects. A stronger export growth is projected, in part due to anticipated rising services exports from the Panama Canal expansion and exports from the Cobre Panama copper mine, which will help narrowing the current account deficit in medium term.

Hong Kong – Panama Trade

Source: Census and Statistics Department of Hong Kong

 

Total exports from Hong Kong to Panama decreased by 7.7% from HK$1,668 million in 2016 to HK$1,540 million in 2017. The top three export categories to Panama were: (1) telecommunications, audio & video equipment (+3.9%), (2) photographic apparatus, equipment and supplies and optical goods, watches and clocks (-4.8%), and (3) clothing & clothing accessories (-28.1%), which represented 68.6% of total exports to Panama.

Source: Census and Statistics Department of Hong Kong

 

ECIC Underwriting Experience

 

The Hong Kong Export Credit Insurance Corporation (ECIC) imposes no restrictions on covering Panamanian buyers. Currently, the insured buyers in Panama are mainly small and medium sized companies. For 2017, the number and the amount of credit limit applications on Panama decreased by 16.2% and 4.0% respectively.  The insured business also decreased by 9.9%. Major insured products were clothing, toys and metallic products, which represented 93.3% of ECIC’s insured business on Panama. The Corporation recorded one payment difficulty case and three claim cases in the past 12 months (from February 2017 to January 2018), involving clothing and miscellaneous products.

 

Please click here to download the charts (PDF format).

 

Last update: 20 February 2018

 

Strengths

Ÿ  Strategic location connecting Europe and Asia

Ÿ  Large domestic market

Challenges

Ÿ  Unstable politics

Ÿ  Geopolitical tensions and the Kurdish issue

Ÿ  High inflation and current account deficit

 

Key Information

Capital

Ankara

Population

80.7 million

Area

783,562 sq km

Currency

Turkish lira (1 TRY = 0.26305 USD as of 23 February 2017)

Official language

Turkish

Form of government

Republic

Ease of doing business by World Bank

# 60 out of 190 in 2017 (↓5)

The Global Competitiveness Index by the World Economic Forum

# 53 out of 137 in 2017/18 (↓2)

Logistics Performance Index by World Bank

# 34 out of 160 in 2016

Major Merchandise Exports (% of total, 2016)

Major Merchandise Imports (% of total, 2016)

Textiles & clothing (18.2%)

Chemicals (13.9%)

Transport equipment (16.3%)

Fuels (13.7%)

Agro-industry (11.0%)

Mechanical machinery (13.3%)

Top three export markets (% of total, 2016)

Top three import markets (% of total, 2016)

Germany (9.8%)

China (12.8%)

UK (8.2%)

Germany (10.8%)

Iraq (5.4%)

Russia (7.6%)

Source: Economist Intelligence Unit

Political Highlights

 

Turkey is a secular democratic state with a majority of Muslim population. It has a unicameral parliament but its political system is highly centralized. Recep Tayyip Erdogan, the former prime minister and still the de facto leader of the dominant Justice and Development Party (AKP), became Turkey's first directly elected president in 2014.  During the snap elections held in November 2015, the AKP won a landslide victory, establishing a majority in parliament and a single party rule.  In April 2017, the Turkish Government conducted a referendum and Turkey’s government will transition from a parliamentary democracy to an executive presidency after the next presidential election in 2019. Turkey has a long history of military interventions in politics. The attempted coup by parts of the military in July 2016 has delivered a severe shock to the Turkish state.  However, the failed coup provided Erdogan a better position to consolidate his power.

Turkey is also home to a sizeable Kurdish minority, which constitutes almost one fifth of the population. The Kurdistan Worker’s Party (PKK) intermittently had armed conflicts with the Turkish security forces, as they believed that the Kurds suffered from economic disadvantage and human rights violations. The Kurdish issue has long been one of the main sources destabilizing Turkey’s politics.

Turkey began formal accession membership talks with the EU in 2005. However, progress has so far been slow amid some EU countries’ concerns on cultural differences. Turkey’s road to EU membership will likely get longer after the failed military coup which has put the two sides in tense relations.  Some EU members proposed another framework like cooperation or partnership in controlling undocumented migration to Europe and the fight against terrorism, instead of membership.  The tensions between the US and Turkey is also deepening amid a Turkish military campaign inside Syria in Feb 2018.

Economic Trend

* Estimates
 ^ Forecasts

Source: Economist Intelligence Unit

Turkey economy is estimated to have exceeded 6% growth in 2017, benefited from the stimulus program launched after the failed coup in 2016.  The lifting of sanctions by Russia probably provided another boost for the Turkish economy.  Private consumption makes up about two-thirds of Turkey’s GDP.  Consumer confidence remained strong, despite a long period of political uncertainty.  The improved relations between Russia and Turkey also brought a recovery in the number of foreign tourists.

On the other hand, inflation reached to the highest level since early 2004, as a result of nominal value of lira fall by about 17% in 2017 and higher energy costs.  This was the seventh year that the Turkey’s central bank missed their target rate at 5%.  For years, president Rrdogan adopted his financial theory to lower borrowing costs that contradict to modern inflation-fighting methods.  IMF in Feb 2018 warned Turkish central bank to raise rates to protect the tumbling lira. 

Turkey has been persistently running a large current account deficit, financed mostly by short-term capital inflows. The chronic current account deficit reflects Turkey’s heavy dependence on imported energy.  Meanwhile, Turkey’s industry imports intermediate goods to produce final goods as they lacked the raw materials for production.  Turkey will remain vulnerable to capital flows, especially during the US interest rate hike cycle.  A reversal in capital flows could trigger a significant economic adjustment given the size of the country’s current account deficit. The scheduled withdrawal of fiscal stimulus, presidential election and terrorist attack remains important downside risk.


Hong Kong – Turkey
Trade

Source: Census and Statistics Department of Hong Kong

 

Total exports from Hong Kong to Turkey decreased by 3.8% from HK$7,801 million in 2016 to HK$7,505 million in 2017. The top three export categories to Turkey were: (1) telecommunications, audio & video equipment (-13.7%), (2) electrical machinery, apparatus & appliances, & parts (+17.8%), and (3) office machines & computers (+69.2%), which represented 70.0% of total exports to Turkey.

 

Source: Census and Statistics Department of Hong Kong

 

ECIC Underwriting Experience

 

The Hong Kong Export Credit Insurance Corporation (ECIC) imposes no restrictions on covering Turkish buyers. Currently, the insured buyers in Turkey range from small and medium sized companies to listed companies. For 2017, the number and the amount of credit limit applications on Turkey decreased by 18.9% and 31.2%, respectively, while insured business increased by 37.9%. Major insured products were electronics, chemical products, and electrical appliances, which represented 74.9% of ECIC’s insured business on Turkey. The Corporation’s underwriting experience on Turkey has been satisfactory, with no claim payment or payment difficulty case reported during the past 12 months (February 2017 to January 2018).

 

 

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Last update: 15 February 2018

 



Key Information

Capital

Chisinau

Population

3.6 million

Area

33,700 sq km

Currency

Moldovan leu (1 MDL = 0.0599 USD as of 13 February 2018)

Official language

Moldovan

Form of government

Republic

Ease of doing business by World Bank

# 44 out of 190 in 2018

The Global Competitiveness Index by the World Economic Forum

# 89 out of 137 in 2017/18 (↑11)

Logistics Performance Index by World Bank

# 93 out of 160 in 2016

Major merchandise exports (% of total, 2015*)

Major merchandise imports (% of total, 2015*)

Manufactures (51.1%)

Manufactures (64.1%)

Agricultural products (47.0%)

Agricultural products (15.7%)

Fuels and mining products (1.9%)

Fuels and mining products (13.4%)

Top three export markets (% of total, 2016*)

Top three import markets (% of total, 2016*)

European Union (65.1%)

European Union (49.1%)

Russia (11.4%)

Russia (13.3%)

Belarus (5.1%)

China (9.8%)

* Most recent year for which data are available

Source: Economist Intelligence Unit, World Trade Organization

Political Highlights

 

Moldova is located in Eastern Europe, bordering Romania to its west and Ukraine to its east. Ethnic Moldavians represent about three quarters of local population. Politics in Moldova has been relatively unstable since its independence from the former Soviet Union in 1991. The eastern region of Transnistria split off from Moldova in a civil war shortly after Moldova’s independence. However, this self-proclaimed state is unrecognized by any United Nations member state, and recognized by only three other non-United Nations states.

Current pro-Russia president Igor Dodon, the former leader of the Party of Socialists of the Republic of Moldova, was elected for a four-year term in November 2016. However, the current European Union (EU)-leaning government is led by prime minister Pavel Filip of the Democratic Party. Political tensions between the two parties persist.

The Association Agreement between the EU and Moldova was signed in June 2014 and has been in full effect since July 2016. Since the Agreement’s provisional application in September 2014, Moldova has benefitted from Deep and Comprehensive Free Trade Area (DCFTA) with the EU. This preferential trade system has allowed Moldova to benefit from reduced or eliminated tariffs for its goods, an increased services markets and better investment conditions.

Economic Trend


* Estimates

Source: International Monetary Fund

 

Moldova depends mainly on the agricultural and agro-processing sectors as well as remittances from Moldovans working abroad. Following a banking fraud that linked to the disappearance of US$1 billion (around 16% of the country’s GDP) from Moldova’s banking system in 2014, the country was dragged into a recession in 2015 and currency plunged to record low.  

To support economic and financial reform, the International Monetary Fund (IMF) approved a three-year US$178 million funding agreement with Moldova in November 2016, with US$36 million disbursed immediately. In December 2017, the IMF released the third disbursement of US$22 million, viewing that progress had been made in improvement of the country’s macroeconomic and financial stability. In 2017, the Moldovan leu appreciated against the US dollar on an annual basis, the first time in five years. Meanwhile, there is an improvement in Moldova’s liquidity position, with foreign exchange reserves rising to a four-year high of US$2.8 billion at the end of 2017.

It is expected that Moldova’s economy will grow by an average of 5.2% between 2018 and 2022, supported by the forecast of a stronger external outlook, an improving labour market and domestic financial conditions. The appreciation of the country’s currency would also help easing inflationary pressures and narrowing the current deficit in near future.

 

Hong Kong – Moldova Trade

 

Source: Census and Statistics Department of Hong Kong

 

Total exports from Hong Kong to Moldova increased by 117.6% from HK$77 million in 2016 to HK$168 million in 2017. The top three export categories to Moldova were: (1) telecommunications, audio & video equipment (+145.7%), (2) office machines & computers (+100.6%), and (3) footwear (+220.5%), which represented 86.0% of total exports to Moldova.

Source: Census and Statistics Department of Hong Kong

 

ECIC Underwriting Experience

 

The Hong Kong Export Credit Insurance Corporation (ECIC) offers coverage on Moldovan buyers with payment terms in Irrevocable Letter of Credit (ILC) and on a case-by-case basis. The Corporation’s underwriting experience on Moldova has been satisfactory, with no claim payment or payment difficulty case reported in the past 12 months (from February 2017 to January 2018).

 

Please click here to download the charts (PDF format).

 

Last update: 13 February 2018

 


 

Key Information

Capital

Baku

Population

9.7 million

Area

86,600 sq km

Currency

Azerbaijani Manat (1 ANZ = 0.5921 USD as of 6 February 2018)

Official language(s)

Azerbaijani

Form of government

Republic

Ease of doing business by World Bank

# 57 out of 190 in 2018

The Global Competitiveness Index by the World Economic Forum

# 35 out of 137 in 2017/18 (↑2)

Major merchandise exports (% of total, 2016*)

Major merchandise imports (% of total, 2016*)

Petroleum products (87.4%)

Machinery & equipment (23.6%)

Food products & animals (5.7%)

Food products (16.3%)

Metals (2.4%)

Metals (15.4%)

Top three export markets (% of total, 2016*)

Top three import markets (% of total, 201